On March 2, 2025, the U.S. Department of Treasury threw a new twist into the ongoing Corporate Transparency Act (CTA) enforcement saga by announcing that it will not enforce any fines or penalties against any U.S. citizens or domestic reporting companies that fail to submit beneficial ownership information (BOI) reports pursuant to the CTA.
In its published statement, the Department of Treasury seemingly ends the existing beneficial ownership reporting requirements under the CTA. The Department of Treasury also intends to issue a proposed rulemaking to narrow the applicability of the CTA’s reporting rule to foreign companies, but it is currently unclear when details on the proposed rulemaking will be available.
This announcement comes on the heels of the impending March 21, 2025 deadline that was put in place by the Financial Crimes Enforcement Network (FinCEN) for reporting companies to disclose their beneficial owners, which had already shifted from the original January 1, 2025 deadline following a series of injunctions and court actions challenging the CTA’s constitutionality and implications on small businesses. In response to some of this ongoing backlash, FinCEN posted a notice on February 27, 2025, committing itself to issuing an interim final rule that will provide new guidance and reduce regulatory burdens on businesses. This sudden announcement by the Department of Treasury followed.
While we wait to see what additional information the Department of Treasury releases following its announcement, businesses may choose not to file their BOI reports knowing they will be free from fines or penalties for any CTA violations. It is, however, important for businesses that are subject to the CTA to continue to monitor all developments, as the status of the CTA continues to be anything but certain. After all, the CTA is a law enacted by Congress in 2021, and the Department of Treasury and FinCEN do not have the authority to repeal it. Congressional action and judicial scrutiny following this announcement from the Department of Treasury may subsequently follow.
If you have questions regarding the status of the CTA as it relates to your business or any ongoing legal developments surrounding the CTA, reach out to KJK’s CTA task force at CTA@kjk.com.